TDS Refund Calculator With Section 244A Interest for AY 2026-27
Add up your TDS from every source against your real tax liability under both regimes, then see your refund plus the Section 244A interest, worked out correctly, and net of the late fee and the tax you will owe on that interest.
Excess Tax Recovery Model: Refund, Interest and Net Benefit
What a TDS Refund Is and Why So Many Salaried Indians Are Owed One
Tax Deducted at Source is the government’s way of collecting tax as income is earned rather than waiting until the year ends. Your employer estimates your annual tax and deducts a slice from every salary. Your bank deducts tax on fixed deposit interest once it crosses a threshold.
A tenant paying high rent, or a client paying professional fees, deducts too. Each deductor pays that money to the government against your PAN, and it shows up in your Form 26AS and Annual Information Statement. The system is efficient for the government, but it routinely collects more than it should from ordinary taxpayers.
The reason is simple. TDS is deducted on an estimate made early in the year, often before you have declared your investments, rent, insurance premiums or home loan interest. An employer who does not have your final declarations will deduct as though you have no deductions at all.
A bank deducts a flat rate on your FD interest regardless of whether your total income is even taxable. By the time the year ends and you actually claim everything you are entitled to, the tax you truly owe is frequently far less than what was already taken. The difference is your refund, and it can run into tens of thousands of rupees. For a great many salaried people it is the largest single sum they receive from the government all year, and yet a surprising number either never claim it or claim less than they are owed simply because they do not sit down and work the numbers.
It is worth pausing on just how widespread over-deduction is, because most people assume TDS is precise. It is not. The employer’s payroll system deducts month by month against a projection made in April, and that projection almost never captures the full picture: the insurance you buy in December, the extra 80C investment you make in March, the rent you paid a landlord who charges no formal receipt until year-end. Every one of those lowers your real tax but arrives too late to change what was already deducted. The gap between the crude monthly estimate and your carefully optimised year-end position is precisely what comes back as a refund.
Banks are blunter still. A bank has no idea what your total income is; it simply sees your fixed deposit interest cross the threshold and deducts a flat rate. A retired person living on modest FD interest, whose total income is below the taxable limit, can have tax deducted all year on money they never owed a rupee of tax on. For them the entire deduction is refundable, and yet many never claim it because they do not realise a return needs to be filed to get it back. Understanding that TDS is an approximation, not a final settlement, is the mental shift that turns an unclaimed refund into money in your account.
Since the new tax regime became the default, a second and even larger source of refunds has appeared. Many employers still deduct TDS assuming the old regime, or an employee declares the old regime at the start of the year and then switches at filing time.
Because the new regime now makes income up to a certain level completely tax-free through the enhanced rebate, an employee whose employer deducted substantial TDS can find their actual liability is zero, making the entire year’s TDS refundable. This is one of the most common and largest refund situations of the current year, and it is exactly what this calculator is built to surface. The moment you switch the regime toggle and watch a large liability collapse to zero, the size of what you are owed becomes impossible to miss.
The catch is that a refund is never automatic. The government does not volunteer to return your money; you must file your income tax return, claim the excess, and wait for the Central Processing Centre to verify and release it. When it does, if the department has held your money past the normal window, it owes you interest under Section 244A. This is where almost every other calculator gets sloppy, either ignoring the interest, using the wrong rate, or forgetting that the interest itself is taxable next year. This tool handles all of it, and for the underlying liability you can cross-check with our income tax calculator, while our TDS Section 194 calculator shows how the deduction that created your refund was worked out in the first place.
How Your Refund and the Section 244A Interest Are Worked Out
The calculation runs in a clear sequence, and understanding it helps you see exactly where your refund comes from and why the interest is what it is.
Work out your real tax liability
The tool applies the correct FY 2025-26 slabs for your chosen regime, subtracts the standard deduction and, in the old regime, your other deductions, then applies the Section 87A rebate, surcharge if applicable and 4% cess. This is the tax you actually owe.
Add up everything you have already paid
All your TDS, from salary, interest, rent and fees, plus any advance tax and self-assessment tax, is totalled. This is what has already reached the government against your PAN, the figure you can verify in Form 26AS.
Compare to find the refund or the balance
If what you paid exceeds what you owe, the difference is your refund. If it falls short, you have a balance to pay before filing. The tool shows which, and by how much, in plain terms.
Compute the 244A interest correctly
If a refund is due and it is at least 10% of the tax determined, interest accrues at 0.5% per month. For an on-time return it runs from 1 April of the assessment year; for a belated one, from your filing date. Part of a month counts as a full month.
A subtle but important point sits inside the interest calculation: the part-month rule works in your favour. Because any fraction of a month counts as a whole month, a refund granted on the second day of a month earns the same interest as one granted on the last day of it. Over a typical eight-month wait this rounding is small, but it means the interest figure the calculator shows can be a rupee or two above a naive day-count, and it matches how the Central Processing Centre actually computes it. The interest is simple, not compound, so it does not build on itself; it is a flat 0.5% of the refund for each month in the eligible window.
The final step is the one competitors skip entirely. The Section 244A interest you receive is not a tax-free gift. It is taxable as Income from Other Sources in the year you receive it, at your slab rate, so the tool estimates that future tax and subtracts it to show your true net benefit.
If you filed late, it also subtracts the Section 234F late fee, which is ₹5,000, or ₹1,000 if your income is below ₹5 lakh. Only after these two adjustments do you see the real figure that will end up in your pocket. The interest rate of 0.5% per month, which works out to 6% a year, applies specifically to refunds of TDS, TCS and advance tax; refunds of self-assessment tax carry a different rate, and the tool uses the correct treatment for the TDS-driven refunds most salaried filers claim.
TDS Refund Rules and Rates at a Reference
The tables below summarise the thresholds and rates that drive your refund and its interest. These are the current rules for AY 2026-27.
| Item | Rule for AY 2026-27 |
|---|---|
| 244A interest rate | 0.5% per month (6% per year) |
| Interest start, on-time filing | 1 April of the assessment year |
| Interest start, belated filing | The date you file the return |
| Part-month rule | Any part of a month counts as full |
| Interest threshold | Refund must be 10% or more of tax |
| Interest taxability | Taxable as Income from Other Sources |
| Section 234F late fee | Amount |
|---|---|
| Income above ₹5 lakh, belated | ₹5,000 |
| Income up to ₹5 lakh, belated | ₹1,000 |
| Filed on or before the due date | Nil |
| Belated return deadline | 31 December of the assessment year |
One reassurance about the interest threshold: it is measured against the tax determined for the year, not against your income or your total TDS. So a filer with a very high tax bill needs a proportionally larger refund to clear the 10% bar, while someone with a modest liability clears it easily. In practice, the taxpayers who fall foul of the threshold are those whose TDS was only slightly more than their liability, leaving a small refund against a large tax figure. If your refund is a healthy chunk of your tax, as it is in a regime-mismatch situation where the whole TDS comes back, the threshold is never a concern.
These rules come directly from the Income Tax Act and are administered by the Central Board of Direct Taxes. The 10% threshold is the one most people have never heard of: if your refund is a small fraction of your total tax, the law simply does not pay interest on it, which is why a large TDS deduction that leaves only a tiny refund earns nothing extra. You can always verify your own TDS credits and refund status on the official Income Tax Department portal, and the detailed rules on refunds and interest are published by the Income Tax Department in the Act itself. Always reconcile your figures with your Form 26AS before filing.
Three Real Refund Situations Across Mumbai, Delhi and Bengaluru
These three filers show the calculator handling the situations that actually produce refunds: a regime mismatch, a multi-source TDS pile-up, and a small refund that falls foul of the interest threshold. Each ends with the true net figure.
Rohit earns ₹11 lakh. At the start of the year he told his employer he would use the old regime, so the company deducted ₹1,17,000 of TDS across the year.
At filing time, he realised the new regime was better for him: with the enhanced rebate, his taxable income of ₹10.25 lakh after the standard deduction falls under the threshold where the Section 87A rebate wipes out the tax entirely. His actual liability under the new regime is zero.
Because his liability is nil, the entire ₹1,17,000 comes back. He filed on time, so interest runs from 1 April of the assessment year, and by the time the refund is processed around mid-November that is eight months, giving ₹4,680 of interest at 0.5% per month.
After a small ₹234 of tax he will owe on that interest next year, his true net benefit is ₹1,21,446. Rohit’s case is the single most common large-refund situation this year, and it exists purely because the regime his employer deducted under did not match the one that actually suited him.
Sneha earns ₹9 lakh in salary and has fixed deposits that generated interest. She stays on the old regime because her deductions are strong: ₹1.5 lakh under Section 80C and others.
Her employer deducted ₹60,000 of TDS on salary, and her bank deducted a further ₹8,000 on the FD interest under Section 194A. Her actual liability, on a taxable income of ₹7 lakh after the standard deduction and her deductions, works out to ₹54,600.
The key here is that Sneha must add both TDS sources together. A calculator that only takes salary TDS would understate her refund by the ₹8,000 the bank deducted.
Her total paid of ₹68,000 against a ₹54,600 liability gives a ₹13,400 refund, comfortably above the 10% threshold, so it earns ₹536 of interest. After the ₹107 of tax she will owe on that interest at her 20% slab, her true net benefit is ₹13,829. Many taxpayers forget their FD TDS entirely and either under-claim or are surprised by the larger refund, which is why aggregating every source matters.
Arjun earns ₹16 lakh under the new regime. His liability works out to ₹1,13,100, and a total of ₹1,18,000 was deducted, so his refund is only ₹4,900.
He also missed the July deadline and is filing a belated return in December. He assumed he would get his ₹4,900 back with a bit of interest on top, as everyone talks about refund interest. The calculator shows him two unwelcome truths.
First, his refund of ₹4,900 is below 10% of his tax determined, which is ₹11,310, so the law pays no interest on it at all. Second, because he filed late, a Section 234F fee of ₹5,000 applies, and since that fee is larger than his refund, he actually ends up ₹100 out of pocket rather than ahead.
Arjun’s case is the cautionary one: a small refund earns no interest, and filing late can turn a modest refund into a net loss. Filing on time would have saved him the entire ₹5,000.
Set the three side by side and the value of a proper calculation is obvious. Rohit would have under-claimed massively if he had not compared regimes; Sneha would have left ₹8,000 of FD TDS on the table if she had only counted her salary; Arjun would have expected interest and been blindsided by a fee. In each case the difference between a rough guess and the real figure was thousands of rupees. A refund is your own money, and the only way to reclaim all of it, with the interest you are due and without the surprises, is to compute it properly before you file.
Expert Tips to Get Your Full TDS Refund Faster
A refund is only as good as the return that claims it. These habits, drawn from how careful filers handle their refunds, help you claim everything you are owed and receive it quickly.
The theme uniting them is preparation. Almost every refund problem, a held payment, a reduced amount, a missing interest, a needless late fee, traces back to something that could have been checked before filing. Spend an hour reconciling your 26AS, validating your bank account and comparing both regimes, and the refund process becomes fast and predictable rather than a source of anxiety.
Reconcile with Form 26AS first
Before you file, match every TDS entry to your Form 26AS and AIS. If your claim exceeds what is recorded there, the refund will be held or reduced, so fix any mismatch with the deductor first.
Compare both regimes every year
The biggest refunds this year come from choosing the new regime at filing when TDS was deducted under the old. Always run both before you file, because the right choice can make your whole liability vanish.
Add every TDS source
Salary is only part of it. Include TDS on FD and other interest, on rent, and on any professional fees. Missing sources means under-claiming the refund you are genuinely owed.
File early and e-verify at once
Returns filed and verified early in the season are processed in days, not weeks. E-verify immediately with Aadhaar OTP; an unverified return is treated as not filed and stalls your refund.
Validate your bank account
Refunds are credited only to a pre-validated bank account linked to your PAN. Validate it on the portal before filing, or a determined refund will simply fail to reach you.
Remember the interest is taxable
Any 244A interest you receive must be declared as Income from Other Sources next year. Note it down when the refund lands so you do not forget it and trigger a mismatch later.
TDS Refund at a Glance
This table gathers the facts you will reach for most as you plan your refund. If you take away only two things, let them be that comparing both regimes can transform your refund, and that filing on time protects both your interest and your pocket.
| Question | Answer |
|---|---|
| What creates a refund? | TDS paid exceeds your actual tax liability |
| How do I claim it? | File your ITR and claim the excess |
| 244A interest rate | 0.5% per month, that is 6% a year |
| When does interest start? | 1 April of the AY, if filed on time |
| Interest threshold | Refund must be 10% or more of tax |
| Is the interest taxable? | Yes, as Income from Other Sources |
| Late filing fee | ₹5,000, or ₹1,000 if income below ₹5L |
| Where to check TDS | Form 26AS and AIS on the portal |
| Typical fast refund time | 15 to 20 days if filed and verified early |
TDS Refund Calculator: Frequently Asked Questions
What is a TDS refund?
A TDS refund is the money the Income Tax Department returns to you when the tax deducted at source from your income during the year exceeds your actual tax liability. TDS is deducted on an estimate, often before you declare your investments, rent or other deductions, so it frequently overshoots the tax you truly owe once everything is applied.
The difference is refundable, but only if you file your income tax return and claim it. The refund is not automatic; the department releases it only after processing your return and verifying your TDS credits against Form 26AS.
How is my TDS refund calculated?
Your refund is the total tax you have already paid minus your actual tax liability. The calculator first works out your liability under your chosen regime, applying the correct slabs, the standard deduction, your other deductions in the old regime, the Section 87A rebate, any surcharge and 4% cess.
It then totals everything you have paid: TDS from salary, interest, rent and fees, plus advance tax and self-assessment tax. If what you paid is more than what you owe, the excess is your refund. The tool also adds the Section 244A interest and nets the late fee and future tax on that interest.
What is Section 244A interest on a refund?
Section 244A of the Income Tax Act requires the department to pay you interest when it holds your refund beyond the normal window. For refunds arising from excess TDS, TCS or advance tax, the rate is 0.5% per month, which is 6% per year, calculated as simple interest.
If you filed on time, interest runs from 1 April of the assessment year until the refund is granted; if you filed late, it runs from your filing date instead. Any part of a month counts as a full month. This interest is paid automatically by the Central Processing Centre and included in the amount credited to your bank account.
Is the 10% threshold real, and how does it work?
Yes, it is a genuine rule that catches many taxpayers by surprise. Section 244A only pays interest if your refund is at least 10% of the total tax determined for the year.
If your refund is a small fraction of your total tax, below that 10% line, the law pays no interest on it at all, no matter how long the department takes. This is why a large TDS deduction that leaves only a small refund earns nothing extra. The calculator checks this threshold for you and tells you clearly when your refund is too small to attract interest, so you are not left expecting interest that will never come.
Is the interest on my refund taxable?
Yes, and this is one of the most commonly forgotten points. While the refund principal itself is not taxable, because it is simply your own excess tax being returned, the Section 244A interest is fully taxable as Income from Other Sources under Section 56.
You must declare it in your income tax return for the financial year in which you actually receive it, and it is taxed at your slab rate. The interest often appears in your AIS, so failing to declare it can trigger a mismatch notice. This calculator estimates the tax you will owe on the interest and subtracts it to show your true net benefit. For most filers the tax on the interest is small, a few rupees to a few hundred, but knowing it in advance means you set the amount aside and avoid a mismatch notice the following year when the AIS flags interest you forgot to declare.
Why is my whole year’s TDS sometimes fully refundable?
This happens most often because of a regime mismatch. If your employer deducted TDS assuming the old regime, or you declared the old regime early and switched at filing, and the new regime turns out to make your tax liability zero through the enhanced Section 87A rebate, then the entire TDS deducted becomes refundable.
Under the new regime for the current year, income up to a certain level after the standard deduction is completely tax-free. So an employee who had substantial TDS deducted can find their actual liability is nil, making every rupee of that TDS a refund. It is the single largest refund situation of the year.
How do I claim my TDS refund?
You claim it by filing your income tax return for the assessment year, accurately reporting all your income, deductions and the TDS credited to you. Log in to the official e-filing portal, complete the relevant ITR form, and the system computes your refund from the difference between your tax paid and your liability.
After filing, you must e-verify the return within the allowed period, usually with an Aadhaar OTP, or it is treated as never filed. The Central Processing Centre then processes the return and, if a refund is due, credits it to your pre-validated bank account, often within a couple of weeks for early filers.
How long does a TDS refund take?
It depends heavily on when you file. Returns filed and e-verified early in the season, well before the July deadline, are often processed within 15 to 20 days, with the refund landing shortly after.
Returns filed close to the deadline face large batch-processing queues and can take several weeks or months. Delays also occur if there is a mismatch between your claim and Form 26AS, if your bank account is not pre-validated, or if the department picks the return for closer scrutiny. Filing early, e-verifying immediately and validating your bank account are the three things most within your control to get the refund quickly.
What is the Section 234F late fee?
Section 234F imposes a fee for filing your income tax return after the due date. If your total income is above ₹5 lakh, the fee is ₹5,000; if it is ₹5 lakh or below, the fee is reduced to ₹1,000.
The fee applies to any belated return filed after the due date but on or before 31 December of the assessment year, which is the final deadline for belated returns. This fee is separate from any interest on unpaid tax and directly reduces the net benefit of your refund. As the third worked example shows, a late fee can even exceed a small refund, leaving you worse off for having filed late.
Can I get a refund if I file a belated return?
Yes, you can still claim your refund by filing a belated return up to 31 December of the assessment year, but there are two costs. First, the Section 234F late fee applies, ₹5,000 or ₹1,000 depending on your income.
Second, the Section 244A interest on your refund runs only from your filing date, not from 1 April of the assessment year, so you lose several months of interest. Filing on time avoids both of these. If you have missed even the belated deadline, you may in limited cases apply for condonation of delay, but that is a discretionary process and far less certain than simply filing within the window.
What is Form 26AS and why does it matter for my refund?
Form 26AS is your consolidated annual tax statement, showing all the TDS and TCS credited against your PAN, along with advance tax and self-assessment tax you have paid. It matters because the Central Processing Centre matches your refund claim against it.
If you claim more TDS than Form 26AS records, the excess is disallowed and your refund shrinks or is held. Before filing, you should reconcile every TDS entry with Form 26AS and the AIS, and if a deductor has not deposited or reported your TDS correctly, get them to fix it first. Filing a claim that matches your 26AS is the surest way to a smooth, full refund.
Do I get a refund on FD interest TDS if my income is not taxable?
Yes. Banks deduct TDS on fixed deposit interest once it crosses the threshold, regardless of whether your total income is actually taxable.
If your total income for the year is below the taxable limit but the bank still deducted TDS on your interest, that TDS is fully refundable when you file your return. To avoid the deduction in the first place, you can submit Form 15G, or Form 15H if you are a senior citizen, to your bank at the start of the year, declaring that your income is below the taxable limit. If you missed doing so, filing your return to claim the refund is the way to get that money back. Senior citizens in particular should watch this, since a higher interest threshold applies to them before TDS kicks in, but once it is deducted the only route to recovery is the return.
What if my TDS was deducted but does not show in Form 26AS?
If a deductor took TDS from your payment but it does not appear in your Form 26AS, it usually means they have not deposited it with the government or have filed their TDS return incorrectly, often with a wrong PAN. You cannot claim a refund for TDS that is not reflected in 26AS, because the department has no record of receiving it against your PAN.
The fix is to contact the deductor, provide your correct PAN, and ask them to deposit the TDS and file or revise their TDS return. Once it appears in your 26AS, you can claim it. Keep the TDS certificate the deductor issued as supporting evidence.
Can the department adjust my refund against past dues?
Yes. Under Section 245, the department can set off your current refund against any outstanding tax demand from earlier years before releasing the balance.
If you have a pending demand, the Central Processing Centre will usually issue an intimation proposing the adjustment, and you have a chance to respond if you disagree with the demand. If the demand is valid, the refund is reduced by that amount and only the remainder is paid to you. This is why it is worth checking the portal for any outstanding demands before you file, and contesting any that are incorrect, so your refund is not unexpectedly reduced.
Does this calculator give an exact refund figure?
It gives a close, well-grounded estimate based on the figures you enter, using the correct FY 2025-26 slabs, rebate, surcharge, cess and the proper Section 244A and 234F rules. However, your final refund is determined by the Central Processing Centre when it processes your return, and it works from the exact figures in your Form 26AS and your ITR.
Small differences can arise from rounding, from income or deductions you have not entered here, or from adjustments the department makes under Section 143(1). Use this tool to understand your position and plan, then rely on the intimation you receive after filing for the definitive figure. Treating the estimate as a planning tool rather than a promise is the right frame: it tells you what to expect and whether choosing a particular regime is worth it, which is exactly the decision you need to make before you file.
Should I choose the old or new regime to maximise my refund?
Choose whichever regime gives you the lower actual tax liability, because that is what maximises your refund against the TDS already deducted. If you have substantial deductions, ₹1.5 lakh under 80C, health insurance, HRA and home loan interest, the old regime may still win.
If your deductions are modest, the new regime’s lower slabs and enhanced rebate usually produce a lower liability and therefore a larger refund. The only way to be sure is to compute both, which is exactly why this calculator lets you switch the regime and see the refund change. Run it both ways before you decide, since the choice can be worth tens of thousands of rupees. Remember too that the choice is not permanent for salaried taxpayers: you can pick a different regime each year at filing, so the best answer this year may differ next year as your deductions and income change.
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Disclaimer and Editorial Transparency
This TDS refund calculator is an educational tool, not tax advice, and not a substitute for filing your income tax return or consulting a qualified professional.
It produces an estimate from the figures you enter, using the FY 2025-26 slabs, the Section 87A rebate, surcharge, 4% cess, and the Section 244A and Section 234F rules as they stand for AY 2026-27. Your final refund is determined solely by the Central Processing Centre when it processes your return against your actual Form 26AS and ITR, and it may differ from this estimate because of rounding, unentered income or deductions, or adjustments made under Section 143(1).
The Section 244A interest rate used here, 0.5% per month, applies to refunds arising from excess TDS, TCS and advance tax, which covers the great majority of salaried refunds; refunds of self-assessment tax carry a different rate. Always reconcile your TDS with your Form 26AS and AIS before filing, and verify your figures and refund status on the official Income Tax Department portal. The governing rules are published by the Income Tax Department. For personal advice on a complex return, consult a chartered accountant. CalcWise.Finance provides tools for informational purposes only and does not file returns, sell financial products or earn commissions.